Auto Insurance Costs Rise In Cold Weather

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  • Many insurance agents have learned in the last several years that consumers are trying to do all they can to save money on their policy costs, and it might therefore be advisable to let potential customers know that the price they’ll pay for their auto insurance will go up significantly if they buy it during the winter months.

    New data suggests that Massachusetts drivers who bought their coverage in January and February typically pay as much as 20 percent more than people who purchased their policies in other months, according to a report from Live Insurance News. The reason this is an issue is that winter weather typically leads to far more claims, and as such, insurers want to insulate themselves from higher costs. The latest data from the National Association of Insurance Commissioners shows that in 2011, the average annual premiums paid by all drivers came to $1,011, the report said. Consequently, it can be inferred that people who buy outside the coldest winter months – which typically have the nastiest weather – can save as much as $200 per month by doing so.

    A bit of a surprise in the findings
    However, it should be noted that seasonal changes can come even in states in which the shifts in weather aren’t quite so severe, the report said. For example, in Hawaii, the cheapest month in which to buy coverage is December, and it’s 50 percent lower than the costs available in March, the state’s most expensive month. A number of other states – Maryland and Pennsylvania, as well as the District of Columbia – have similar fluctuations between their cheapest and most expensive months, while South Dakota, Arkansas, and Utah saw the smallest changes between these months.

    However, it’s also important to note that a new study from TransUnion shows that consumers are generally unlikely to shop around for new car insurance in general, and thus insurance agents who try to more actively reach out to people could put themselves in a better position to succeed. This may be especially true if they are able to highlight the cost differences available just for signing up when rates are at their most affordable, because consumers often might not even know that such options are available to them specifically because of that lack of shopping around that’s now prevalent in the market.